Lord Myners mauls Co-op bigwig for bank's £1.5bn black hole

Lord Myners has launched a blistering attack on one of the most powerful Co-operative members, saying it was ‘astonishing’ that he still sits on the board.

Giving evidence to the Treasury Select Committee of MPs hours after the publication of his report into the Co-op, Myners said Ben Reid had sat on the Co-op Bank’s audit committee for three years while the bank ran up a £1.5billion black hole in its finances and reached the brink of collapse.

Reid, boss of the powerful Midcounties Co-operative, is thought to have his sights on being the next chief executive of the Co-op Group after Richard Pennycook, the acting chief executive, made clear he did not want the job permanently. Myners told MPs: ‘I find it astonishing that Mr Reid sits on the board.’

Astonished: Myners said Ben Reid had sat on board while Co-op Bank was driven to brink of collapse

The comments could be seen as payback for the former Marks & Spencer chairman. Reid has proved to be the biggest obstacle to his plans to reform the ‘labyrinthine’ governance of the Co-op Group, laid out in detail yesterday in a lengthy report.

The Midcounties board voted against Myners’ proposals last month, before they were published in full. It is thought the peer’s decision to step down from the board just days later was due party to exasperation over this opposition.

More...

Reid is one of the five representatives of independent co-operatives who sit on the Co-op Group’s 20-strong board.

Yesterday Myners said he expected all bar one of the independent co-operatives to back his reform. But he said it was unclear how the Co-op’s seven regional boards would vote. Referring to the lucrative fees and influence they will have to give up, he said: ‘It will require a degree of selflessness on their part to accept change in their roles.’

The peer’s proposals include scrapping the Co-op Group’s existing board, which is dominated by elected Co-op members, and replacing it with a plc-style board of experienced professionals. Its sprawling network of regional boards would also be scrapped. Myners also wants to set up a National Membership Council of 50 elected members to uphold the principles of the Co-operative movement.

And he wants to empower the Co-op’s eight million ordinary members by introducing a ‘one member one vote’ system on key business decisions.

A vote on the reforms will take place at some point after the group’s annual general meeting on May 17.